The assessee contended that the Principal Commissioner could not invoke section 263 because the assessment order was already under appeal before the Commissioner (Appeals). The Tribunal held that the revisionary jurisdiction under section 263 extends to issues which are not the subject matter of the pending appeal. Since the issues relating to section 115BBE and penalty under section 271AAC were not before the Commissioner (Appeals), the exercise of revisionary jurisdiction was valid.  The Assessing Officer initiated penalty proceedings under section 271(1)(c) instead of section 271AAC after making an addition under section 68. The Tribunal held that although revision cannot ordinarily be invoked solely for directing initiation of penalty, where the assessment suffers from other jurisdictional errors causing prejudice to the Revenue, the Principal Commissioner can validly revise the assessment and direct initiation of penalty under the correct provision. The Assessing Officer made an addition under section 68 but taxed it at the normal rate instead of applying the mandatory provisions of section 115BBE. The Tribunal held that there was nothing on record to show that the Assessing Officer had examined the applicability of section 115BBE or had taken a conscious view. Failure to apply the mandatory provision rendered the assessment erroneous and prejudicial to the interests of the Revenue. The revision under section 263 was therefore upheld.  (AY. 2017-18).